Franchise troubles: quality issues at bubble tea brands

While almost all bubble tea brands in Vietnam are part of franchises, several brands fail in their oversight and management of their shops, leading to varying quality and taste across shops.

Quality issues bubble up among bubble tea franchises

According to a survey of VIR, the bubble tea franchise market in Vietnam is quite lively with nearly 40 brands and hundreds of stores across the country. The expenditure for purchasing franchising rights and opening a bubble tea shop is between VND800 million ($34.78 million) and billions of dong. However, there are more attractive offers.

Notably, Pozaatea launched a bubble tea franchise programme of only VND160 million ($6.95 million). Besides, Bumba announced an initial franchising expenditure of VND80 million ($3.47 million), while giving VND10 million ($434.78) in cash for the first partners who sign franchising contracts and complete the payment in three days.

However, a representative of a famous bubble tea brand in Hanoi (where the expense of buying the franchising rights and opening a shop is nearly VND4 billion – $173,913) told VIR that there are significant price differences between franchising rights, as the cost rises with the franchise quality as well as comes with strict quality control.

“For example, after buying the copyright for the north market, we can sell it on to partners who want to expand our brand in the north, we will strictly manage the ingredients, the service quality, and offer solutions to shops that report low revenue. However, I saw that the owners of numerous other bubble tea franchises neglect the management of their partners, and as a result, their partners can use ingredients of unclear origin (while they are legally obliged to use the sources set by the franchise owners), thus there is no homogeneity in the quality of drinks and services offered at these shops. There are even fake brands,” she said.

In reality, in 2017, a Royaltea store in Thai Phien Street, Hai Ba Trung district, Hanoi was suddenly closed, renamed, and then moved to another location. This was the first unit of Royaltea in Hanoi and drew a great crowd from the capital’s youth.

The owner of this store told local media that Royaltea in Vietnam did not register a copyright. “Even in several other foreign markets, Royaltea is not allowed to register a copyright. I realised this after a long time of doing business, so I chose another brand to develop at another location.” After this case, a large number of Royaltea stores have opened in Hanoi, Ho Chi Minh City, and other big cities, with only some of them confirming to be officially franchised.

According to the discussion between the representative of Royaltea Hong Kong and Kenh14.vn, Royaltea comes from Guangdong, China and is operated by Hoang Tra Company. In fact, the stores that are officially franchised will receive the technique of preparation and ingredients from Hoang Tra, and will definitely set themselves apart through the sheer quality of their products.

Meanwhile, another bubble tea brand, Ding Tea, has been complained of a great deal recently. Numerous customers said that the quality of Ding Tea drinks have been deteriorating, and the staff at some stores are positively rude.

“I was disappointed by the cup of bitter tea, which might have been made a long time before and should have been thrown away instead of selling it to customers. I do not think I will drink Ding Tea ever again,” said customer Giang My.